Exhibit 10-4
▇▇▇▇▇▇▇▇▇ FARMS, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement"), dated as of
the day of ________________, ____ (the "Date of Grant"), is delivered by
▇▇▇▇▇▇▇▇▇ Farms, Inc., and its subsidiaries and affiliates (collectively
referred to as "SFI") to ________________________________________ (the
"Optionee"), who is an executive officer or key employee of SFI.
WHEREAS, the Board of Directors of ▇▇▇▇▇▇▇▇▇ Farms, Inc. (the
"Board") recommended stockholder approval of, the stockholders approved
and the Board adopted the ▇▇▇▇▇▇▇▇▇ Farms, Inc. Stock Option Plan (as
amended and restated to the date hereof, the "Plan");
WHEREAS, the Plan provides for the granting of incentive stock
options by the Board (or, if applicable, a committee thereof appointed
pursuant to Section 1.02(d) of the Plan) to executive officers and key
employees of SFI to purchase, or to exercise certain rights with respect
to, shares of the Common Stock of SFI, par value $1.00 per share (the
"Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) considers the
Optionee to be a person who is eligible for grant of an incentive stock
option under the Plan, and has determined that it would be in the best
interest of SFI to grant the incentive stock option documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Grant of Incentive Stock Option.
(a) Subject to the terms and conditions hereinafter set forth,
SFI, with the approval and at the direction of the Board (or, if
applicable, a committee thereof appointed pursuant to Section 1.02(d) of
the Plan), hereby grants to the Optionee, as of the Date of Grant, an
option to purchase up to _______ shares of Stock at a price of
$__________ per share, which price per share is at or above the present
fair market value. Such option is hereinafter referred to as the
"Incentive Stock Option" and the shares of stock purchasable upon
exercise of the Incentive Stock Option are hereinafter sometimes
referred to as the "Incentive Stock Option Shares." The Incentive Stock
Option is intended by the parties hereto to be, and shall be treated as,
an "incentive stock option," pursuant to and as such term is defined
under Sections 421 and 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
(b) This Incentive Stock Option is granted subject to the
following additional terms and conditions (if none, so indicate):
2. Term and Exercise.
This Incentive Stock Option may be exercised during a period
beginning one year after and ending ten years after the date of grant
thereof (the "option term"). Unless a shorter period is provided by the
Board (or, if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan),
this Incentive Stock Option shall be
exercised in accordance with this section 2. During the first year of
the option term, no more than 25% of the initial total number of shares
covered by the Incentive Stock Option may be exercised and purchased by
the Optionee. During the second year of the option term, no more than
50% of the initial total number of shares covered by the Incentive Stock
Option may be exercised and purchased by the Optionee, such percentage
to include the percentage, by number of shares, purchased in the
previous year of the option term. During the third year of the option
term, no more than 75% of the initial total number of shares covered by
the Incentive Stock Option may be exercised and purchased by the
Optionee, such percentage to include the percentages, by number of
shares, previously purchased in earlier years of the option term on a
cumulative basis. During the fourth year of the option term, 100% of the
initial total number of shares covered by the Incentive Stock Option may
be exercised and purchased by the Optionee, such percentage to include
the percentages, by number of shares, previously purchased in earlier
years of the option term on a cumulative basis. No fractional shares
shall be issued as a result of the exercise of this Incentive Stock
Option. No Incentive Stock Option shall be exercisable after the
expiration of its option term.
3. Termination of Incentive Stock Option.
(a) Except as provided in Sections 3(b), 3(c) and 3(d) of this
Agreement, upon termination of the Optionee's employment, the Incentive
Stock Option, to the extent not previously exercised, shall terminate
immediately upon such termination of employment, or if the optionee is
no longer eligible to participate in the Plan by virtue of his or her
appointment to a position that no longer falls within the description
set forth in Section 1.03 of this Plan.
(b) Upon termination of the Optionee's employment by reason of
death of the Optionee, the Incentive Stock Option may be exercised, but
only to the extent exercisable on the date of such death, within one (1)
year from and after the date of the Optionee's death. The Incentive
Stock Option may be exercised by the executor or administrator of the
deceased Optionee's estate or by a person receiving the Incentive Stock
Option by will or under the laws of descent and distribution of the
state in which the Optionee resided.
(c) Upon termination of the Optionee's employment by reason of
permanent and total disability as defined under Section 22(e)(3) of the
Code, the Incentive Stock Option may be exercised, but only to the
extent exercisable on the date of such permanent and total disability,
during the one (1) year period following the date of such termination of
the Optionee's employment.
(d) Upon termination of the Optionee's employment by reason of
retirement or disability other than as defined by Section 3(c) of this
Agreement, the Incentive Stock Option may be exercised, but only to the
extent exercisable on the date of such retirement or disability, during
the three (3) month period following the date of such termination of the
Optionee's employment.
(e) A transfer of the Optionee's employment from one affiliate
of SFI to another shall not be deemed to be a termination of the
Optionee's employment.
(f) Notwithstanding any other provisions set forth herein or in
the Plan, if the Optionee shall (i) commit any act of malfeasance or
wrongdoing affecting SFI, (ii) breach any covenant not to compete or
employment contract with SFI, or (iii) engage in conduct that would
warrant the Optionee's discharge for cause (excluding general
dissatisfaction with the performance of the Optionee's duties, but
including any act of disloyalty or any conduct clearly tending to bring
discredit upon SFI), then any unexercised portion of the Incentive Stock
Option shall immediately terminate and be void.
4. Exercise of Incentive Stock Option.
(a) During the Option Term, the Optionee may exercise the
Incentive Stock Option with respect to all or any part of the number of
Incentive Stock Option Shares then exercisable hereunder by giving the
Board of SFI (or, if applicable, a committee thereof appointed pursuant
to Section 1.02(d) of the Plan) written notice of intent to exercise
substantially in the form attached hereto as Exhibit A. The notice of
exercise shall specify the number of Incentive Stock Option Shares as to
which the Incentive Stock Option is to be exercised and the date of
exercise thereof, which date shall be at least five days after the
giving of such notice unless an earlier date shall have been mutually
agreed upon.
(b) Full payment (in U.S. dollars) by the Optionee of the option
price for the Incentive Stock Option Shares purchased shall be made on
or before the exercise date specified in the notice of exercise in cash,
or, with the prior written consent of the Board (or, if applicable, a
committee thereof appointed pursuant to Section 1.02(d) of the Plan), in
whole or in part through the surrender of previously acquired shares of
Stock at their fair market value on the exercise date.
On the exercise date specified in the Optionee's notice or as soon
thereafter as is reasonably practicable, SFI shall cause to be delivered
to the Optionee, a certificate or certificates for the Incentive Stock
Option Shares then being purchased (out of theretofore unissued Stock or
reacquired or surrendered Stock, as SFI may elect) upon full payment for
such Incentive Stock Option Shares. The obligation of SFI to deliver
Stock shall, however, be subject to the condition that if at any time
the Board (or, if applicable, a committee thereof appointed pursuant to
Section 1.02(d) of the Plan) shall determine in its discretion that
(i) the listing, registration or qualification of the Incentive Stock
Option or the Incentive Stock Option Shares upon any securities exchange
or under any state or federal law, or (ii) the consent or approval of
any governmental regulatory body, or (iii) an agreement by the Optionee
with respect to the disposition of shares of Common Stock, is necessary
or desirable as a condition of, or in connection with, the Incentive
Stock Option or the issuance or purchase of Stock thereunder, the
Incentive Stock Option may not be exercised in whole or in part unless
such listing, registration, qualification, consent, approval or
agreement shall have been effected or obtained free of any conditions
not acceptable to the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan).
(c) If the Optionee fails to pay for any of the Incentive Stock
Option Shares specified in such notice or fails to accept delivery
thereof, the Optionee's right to purchase such Incentive Stock Option
Shares may be terminated by SFI. The date specified in the Optionee's
notice as the date of exercise shall be deemed to be the date of
exercise of the Incentive Stock Option, provided that payment in full
for the Incentive Stock Option Shares to be purchased upon such exercise
shall have been received by such date.
5. Adjustment of and Changes in Stock of SFI.
In the event of a reorganization, recapitalization, change of
shares, stock split, spinoff, stock dividend, reclassification,
subdivision or combination of shares, merger, consolidation, rights
offering, or any other change in the corporate structure or shares of
capital stock of SFI, the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) shall make such
adjustment as it deems appropriate in the number and kinds of shares of
Stock subject to the Incentive Stock Option or in the option price;
provided, however, that no such adjustment shall give the Optionee any
additional benefits under the Incentive Stock Option.
6. Fair Market Value.
"Fair market value" as of any date and in respect of any share of
Common Stock means the closing price on such date or on the next
business day, if such date is not a business day, of a share of Common
Stock reflected in the NASDAQ National Market System traded under the
Symbol SAFM, provided that, if shares of Common Stock shall not have
been traded on NASDAQ for more than 10 days immediately preceding such
date or if deemed appropriate by the Board (or, if applicable, a
committee thereof appointed pursuant to Section 1.02(d) of the Plan) for
any other reason, the fair market value of shares of Common Stock shall
be as determined by the Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) in such other manner
as it may deem appropriate. In no event shall the fair market value of
any share of Common Stock be less than its par value.
7. No Rights as a Stockholder.
Neither the Optionee nor any personal representative shall be, or
shall have any of the rights and privileges of, a stockholder of SFI
with respect to any shares of Stock purchasable or issuable upon the
exercise of this Incentive Stock Option, in whole or in part, prior to
the issuance of certificates for shares of Common Stock to said person.
8. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Short-Swing Profit Liability Exemption
Requirements.
Notwithstanding
any other provision of this Agreement to the
contrary, the Incentive Stock Option granted under this Agreement shall
be transferrable (i) by the option holder only by will or under the laws
of descent and distribution of the state in which the option holder
resided on the date of his death, and (ii) by the Company pursuant to a
qualified domestic relations order as defined by the Code or Title I of
the Employee Retirement Income Security Act or the Rules thereunder.
9. No Rights of Employment.
Neither the granting of this Incentive Stock Option nor its
exercise shall be construed as granting to the Optionee any right with
respect to continuance of employment with SFI. Except as may otherwise
be limited by a written agreement between SFI and the Optionee, and
acknowledged by the Optionee, the right of SFI to terminate at will the
Optionee's employment with it at any time (whether by dismissal,
discharge, retirement or otherwise) is specifically reserved by SFI.
10. Amendment of Incentive Stock Option.
The Board (or, if applicable, a committee thereof appointed
pursuant to Section 1.02(d) of the Plan) may, without further action by
the stockholders and without the consent of or further consideration
from the Optionee, amend, condition or modify this Incentive Stock
Option in response to changes in securities or other laws or rules,
regulations or regulatory interpretations thereof applicable to the
Incentive Stock Option or to comply with stock exchange rules or
requirements. The Board (or, if applicable, a committee thereof
appointed pursuant to Section 1.02(d) of the Plan) may amend this
Incentive Stock Option otherwise with the written consent of the
Optionee.
11. Notice.
Any notice to SFI provided for in this instrument shall be
addressed to it in care of its Secretary at its executive offices at
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and any notice to the
Optionee shall be addressed to the Optionee at the current address shown
on the payroll records of SFI. Any notice shall be deemed to be duly
given if and when properly addressed and posted by registered or
certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
This Incentive Stock Option is granted pursuant to the terms of
the Plan, which terms are incorporated herein by reference, and the
Incentive Stock Option shall in all respects be interpreted in
accordance with the Plan. The
Board (or, if applicable, a committee
thereof appointed pursuant to Section 1.02(d) of the Plan) shall
interpret and construe the Plan and this instrument, and its
interpretations and determinations shall be conclusive and binding on
the parties hereto and any other person claiming an interest hereunder,
with respect to any issue arising hereunder or thereunder.
13. Governing law.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in accordance
with the laws of the State of Mississippi, except to the extent
preempted by federal law, which shall to that extent govern.
IN WITNESS WHEREOF, SFI has caused its duly authorized officers to
execute and attest this Incentive Stock Option Agreement, and to apply
the corporate seal hereto, and the Optionee has placed his or her
signature hereon, effective as of the Date of Grant.
▇▇▇▇▇▇▇▇▇ FARMS, INC.
ATTEST:
By:
Name:
Title:
ACCEPTED AND AGREED TO:
Optionee
NOTICE OF EXERCISE OF INCENTIVE STOCK OPTION
▇▇▇▇▇▇▇▇▇ FARMS, INC.
ATTENTION: The Board of Directors
Stock Option Committee
Gentlemen:
Notice is hereby given of the undersigned's intent to exercise the
Incentive Stock Option granted to the undersigned pursuant to the
Incentive Stock Option Agreement dated _______________, ______ entered
into by and between the undersigned and ▇▇▇▇▇▇▇▇▇ Farms, Inc. The
Incentive Stock Option shall be exercised with respect to
______________________ (_____) shares of the common stock, par value
$1.00 per share, of ▇▇▇▇▇▇▇▇▇ Farms, Inc., at the exercise price of
$______________ per share. The date of exercise shall be
_______________, ______ which is five days or more after the date of
this notice.
In connection with the exercise of the Incentive Stock Option, the
undersigned acknowledges that no withholding of income taxes is
required.
Employee/Optionee
Dated: ________________, ______
Exhibit A